Advice required re declined loan - great credit score

1DayAAT

It will be coming from your lack of credit history, nothing more. They like to see that you have steadily serviced a credit card or two, ideally a loan and some kind of contract like a phone for a considerable time to show you as a good risk. Raise your credit limit to about £5k and continue to service it as you have. Perhaps get a second one. Things will improve. I earn only a little more than you but ended up with an £11k loan last year from my bank no problem. I have a mortgage, 2 fully serviced credit cards and have 2 previous loans paid off. This can be the only thing I can think that they are looking at in your case and the reason for the decline.

tamsmsc

1DayAAT wrote: »

It will be coming from your lack of credit history, nothing more. They like to see that you have steadily serviced a credit card or two, ideally a loan and some kind of contract like a phone for a considerable time to show you as a good risk. Raise your credit limit to about £5k and continue to service it as you have. Perhaps get a second one. Things will improve. I earn only a little more than you but ended up with an £11k loan last year from my bank no problem. I have a mortgage, 2 fully serviced credit cards and have 2 previous loans paid off. This can be the only thing I can think that they are looking at in your case and the reason for the decline.

That is good to hear... Since the age of 18, I have done "credit"-y things on an average of once a year... ie. in my Experian report I have 6 things listed under the credit section. All repayments paid back perfectly. But I'm 24, how much can they expect me to have borrowed? Surely, this is the age I'd start using all this stuff etc and it should count in my favour that I've consciously been borrowing in order to build my credit history?

tamsmsc

hyubh wrote: »

Must be for something important!



So in under 10 months time you could have saved the £10K yourself and avoided the interest? You sound the perfect customer - what a confusing state of affairs indeed.



... because you knew you were about to apply for a £10K loan and didin't want to overdo your pre-existing credit levels? I expect a credit limit of £500 is chickenfeed for a 24 year old with an income that is over £1000 net of outgoings every month.

And yet... during the time I've been typing this you've provided some more details:



Ah...



So... on minimal credit history you want to borrow over half your gross salary to purchase a rapidly depreciating asset. Given you could make the monthly repayments '6 times over', presumably you still live at home, otherwise how do electricity bills and council tax get paid, rent or a mortgage be kept on top of, and the fridge restocked?

Yes, I live at home.

Jesus, it's my first time applying for this stuff and so I'm looking around for advice... what's with all that sarcasm? Helpful though, under all the sarcasm, so thanks.

tamsmsc

So you guys don't think it's worth appealing?

I spoke to my uncle who's a bank manager at Barclays and he thought I had a good shot at it... but this is beginning to make me feel anxious again. Arg!

redcard

tamsmsc wrote: »

Oh They never mentioned that to me. Why wouldn't they say?
...Even though they saw I put away at least £400 a month?

Use some of this, save you on interest

Gaz83

Few things which I'll try to sum up into one post:

1) Your 'credit score' is meaningless. Lenders don't see it whether it's 500 or 999. This is why it's a 'random' number. What they do see is your credit history and this is where having sensibly managed credit accounts is worthwhile. If your highest credit account is £500 then it could very well be they won't trust you with a loan of £10,000. Speaking of which...

2) I don't work in a bank or a building society, but a great deal of anecdotal advice from customers and employees on here is that lenders will consider lending roughly 50% of a person's gross income. As you don't earn £20,000, a loan of £10,000 is a big ask.

3) If you can afford to pay £1,080 to a loan, then save up for ten months and buy a car in cash.

jonesMUFCforever

£400 a month savings - how much is in your pot now?


Are you buying a new car - if so try HP on the car - Ford gave me a rate of 4.3%APR - 2 years payments with a balloon at the end.

chanz4

tamsmsc wrote: »

So you guys don't think it's worth appealing?

I spoke to my uncle who's a bank manager at Barclays and he thought I had a good shot at it... but this is beginning to make me feel anxious again. Arg!

cant he lend it you with his bonus

dealer_wins

Use your savings for a car. Dont become a slave to debt at your young age!!

Remember a car is a luxury, not a necessity!!

Luxuries should be funded from savings not borrowings!!

PeacefulWaters

1. Stop hanging on to your credit number as if it's something important. While the conduct of your accounts is important the number isn't.

2. The lower the rate offered means there are fewer people who get accepted. HSBC have a price low lend low risk policy.

3. Some lenders have a "no more than 50% of salary" rule for all unsecured credit. That doesn't mean all lenders do. Equally, £10k might be a magic decline number and £9,900 could be accepted on appeal.

4. Some lenders' credit scoring systems have age related hurdles. 25 is better than 24, a bit like car insurance.

5. While staff may have a gut feel, they don't know the algorithms that sit behind the credit scoring systems of their employer. Don't expect clear reasons for being declined because they aren't available.

6. Borrowing a large sum like this over a longer term will impact mortgage availability. Saving up would be better.

7. There are other sources of credit. Car dealers. Zopa. Other banks. Credit unions. Building societies. Savings are best though.

8. Appeals can succeed but rarely do. You need to introduce other information not taken into account by the original application to have a realistic chance of success.

9. Requesting a five year term for a car might have upset the applecart. Four year term or less will, subject to affordability, have a better chance of success.

10. Save up.